Credit Suisse pay retreat puts chairman on spot 18 Apr 2017 The Swiss bank has bowed to investor pressure by proposing cuts to 2016 bonuses awarded last month and a cap on payouts for this year. New say-on-pay rules necessitated the climbdown. The episode shows an embarrassing lack of foresight by the board and Chairman Urs Rohner.
Activism prods GAM in right direction 18 Apr 2017 The Swiss hedge fund group will review compensation and cap its CEO’s pay because of pressure from investor RBR. The activist’s more disruptive plans may not win backing from other investors. But it can claim credit for forcing change in an industry resistant to shakeups.
Chinese news app gets a sci-fi valuation 18 Apr 2017 A recent fundraising values Toutiao at $11 bln. Mainland advertisers are flocking to mobile apps, and Toutiao has a huge user base. But news feeds are not new and the business model has disappointed in the West. Buzzwords such as AI and big data are like clickbait for investors.
Netflix content crown begins to fit comfortably 17 Apr 2017 The video service missed subscriber estimates yet still nearly hit 100 mln customers. The plan to spend billions on films and TV series like “Stranger Things” is helping to lift its base. But it's still far from able to justify a stock price trading at 130 times earnings.
Arconic CEO’s foolishness saves its board, for now 17 Apr 2017 Klaus Kleinfeld's unauthorized contact with Elliott Management in the midst of a proxy battle gave directors an easy excuse to let the poor-performing boss go. The affair, though, underscores the hedge fund's argument that the board bears much of the burden for the firm's woes.
Murder video puts lie to Facebook cleanup pledge 17 Apr 2017 Mark Zuckerberg's firm bungled its response to the grisly posting of a man being shot. The incident jars with the social network's promise to police fake news and other objectionable posts. Experienced editors, not algorithms, are the answer to Silicon Valley's content problems.
Viewsroom: United joins corporate culture chaos 13 Apr 2017 Taking three days to offer a basic apology to the passenger dragged off a flight suggests deeper problems at the U.S. airline. Poor leadership and processes took a toll on Wells Fargo and Toshiba, too. Executives and boards ignore the lessons of cultural failures at their peril.
U.S. banks all dressed up with few places to grow 13 Apr 2017 Citi, JPMorgan and Wells Fargo started 2017 with results that exceeded expectations. Some of the investor exuberance over possible tax cuts and regulatory rollbacks has abated, however. Loan growth is slowing and credit costs may soon rise. Bank valuations have further to fall.
Wells Fargo swaps scandal for lending worries 13 Apr 2017 Estimates-beating first-quarter results confirm the debacle over fake accounts tarred the bank’s reputation, not its bottom line. Warren Buffett renewed his support even as regulators forced him to trim his stake. But stagnant lending poses a threat to Wells’ lofty valuation.
GM broadside leaves David Einhorn in back seat 12 Apr 2017 The activist has stepped up his campaign for the automaker to create a second class of stock by resorting to belittlement, accusation and three board nominees. The war of words does little to alter the fundamental arguments, or Einhorn’s chances of success.
Breakdown: How the smart money sees Sears upside 12 Apr 2017 It's easy to interpret CEO Eddie Lampert's commitment to the ailing U.S. retailer as bordering on obsessive. Bruce Berkowitz is another matter. His firm, Fairholme, reckons Sears could be worth perhaps 10 times its $1.4 bln valuation. Breakingviews unpacks the real-estate logic.
M&A PR spins boutique banking model 12 Apr 2017 Brunswick's U.S. boss Steve Lipin is decamping to start his own financial communications shop. Amid record merger activity, there's room in the propaganda oligopoly. As with investment bankers going it alone, it'll test the power of personal reputation against corporate brands.
United fiasco puts a value on the humble apology 12 Apr 2017 It's a sad affair when an airline reliant on consumer loyalty can be so wholly upstaged in the contrition department by White House flack Sean Spicer. United's ham-fisted response to “re-accommodate-gate” is a warning to all corporations: Say sorry first, ask questions later.
Tesco customer-first strategy will chafe investors 12 Apr 2017 The grocer had its first full year of like-for-like UK sales growth in seven years. Boss Dave Lewis hopes to shield shoppers from rising prices, but not crush suppliers. The risk is that he has to fund that plan with the spoils of Tesco’s $4.6 bln purchase of wholesaler Booker.
BHP’s oil jewel has value even without breakup 12 Apr 2017 The mining giant is under activist pressure to spin off its petroleum business. That would deliver little value for shareholders, a sum-of-the-parts valuation suggests. BHP chief Andrew Mackenzie could do worse, though, than show he is open to a bid at a healthy premium.
Bollore kicks down unlocked door at Telecom Italia 11 Apr 2017 French raider and Vivendi Chairman Vincent Bollore will soon nominate the majority of the telco’s board with only a minority stake. Governance purists could snarl at potential conflicts. Still, resistance has so far been weak, and Bollore’s influence has not been a bad thing.
Whole Foods cart already loaded with Jana produce 11 Apr 2017 Barry Rosenstein’s activist fund wants the $11 bln grocer to shake up management and the board, boost profit and explore a sale. The upscale grocer has sampled most of these wares as it tries to turn around limp sales. Jana’s push should speed up the checkout process.
Toshiba pays price for bad Japanese habits 11 Apr 2017 The energy-to-electronics giant says there is doubt about its survival, with shareholders' equity going negative and further huge exposure to bankrupt nuclear-construction unit Westinghouse. Conglomerate sprawl, weak governance and ill-judged overseas M&A all played their part.
Tesla shareholders drive off into la-la land 11 Apr 2017 They have charged up the electric-auto maker to become, at $51 bln, America’s largest by market cap. Ford and GM face challenges. But Tesla’s current valuation implies investors think CEO Elon Musk will outdo even some of his biggest cheerleaders’ already optimistic assumptions.
Banco Popular’s self-help plan looks forlorn 11 Apr 2017 The Spanish lender’s new chair has admitted that it needs to raise capital, and isn’t ruling out the option of a sale. But a capital hike would be prohibitively dilutive, and Popular’s toxic balance sheet may put off buyers. That leaves a bail-in or state-assisted merger.